Senate Joint Resolution No. 27

Introduced by Senator Padilla

(Principal coauthor: Senator Wolk)

(Coauthors: Senators DeSaulnier, Hill, and Pavley)

May 28, 2014

Senate Joint Resolution No. 27—Relative to railroad safety.

LEGISLATIVE COUNSEL’S DIGEST

SJR 27, as introduced, Padilla. Railroad safety: transportation of crude oil.

This measure would urge the United States Department of Transportation and other relevant federal entities to (1) safeguard communities and environmentally sensitive areas from rail accidents involving transportation of crude oil by expediting rail safety reforms, (2) prioritize safety considerations over cost-effectiveness in deliberations about improving the transport of crude oil by rail, (3) mandate, at a minimum, the best practices explained in a 2014 safety initiative, as specified and (4) partner with the Canadian Transportation Agency to improve safety of the North American railroad tank car fleet by swiftly adopting a stricter design standard, and by retrofitting or phasing out tank cars that do not meet that standard.

Fiscal committee: no.

WHEREAS, Recent years have seen a significant increase in
crude oil production from the Bakken region of North Dakota and
Montana as well as from the bituminous sands, commonly known
as tar sands, of Canada. Because crude oil currently is not
transported to California through pipelines, and because transport
by barge and truck is relatively expensive, energy companies have
turned to railroads for distribution of this crude oil; and

WHEREAS, According to the Association of American
Railroads, transportation of crude oil by rail has a 65 percent lower
spill rate than when transported by pipeline, that is, 2.2 vs. 6.3
gallons spilled per million ton-miles generated. Nonetheless, trains
carry crude oil throughout the country, including through many
densely populated and environmentally sensitive areas; and

WHEREAS, According to the Association of American
Railroads, roughly 400,000 carloads of crude oil traveled by rail
to refineries located along the West Coast, Northeast, and Gulf of
Mexico in 2013. This number is up from 9,500 in 2008, a 4,000
percent increase; and

WHEREAS, Because of this rapid change in the energy and
transportation sectors, safety rules, regulations, and oversight may
not be aligned with current operations; and

WHEREAS, The United States Pipeline and Hazardous
Materials Safety Administration and the Federal Railroad
Administration jointly initiated Operation Classification to test
samples, and verify labeling, of crude oil coming from the Bakken
formation. Bakken crude oil is now understood to be highly
flammable and more prone to ignite during an accident than
traditional heavy crude oil; and

WHEREAS, A series of derailments over the past year have
raised the profile of crude oil transportation by rail among local,
state, and federal officials. On July 6, 2013, a runaway train
carrying crude oil exploded upon derailment in downtown
Lac-Mégantic, Québec, causing the death of 47 people, the
evacuation of an entire community, the burning or spilling of 1.5
million gallons of crude oil, and over one billion dollars
($1,000,000,000) in damages. Since this tragedy, eight more
high-profile rail accidents involving transportation of crude oil
have occurred in four states and three Canadian provinces,
including, most recently, on April 30, 2014, in Lynchburg,
Virginia; and

WHEREAS, According to the Pipeline and Hazardous Materials
Safety Administration, the amount of crude oil spilled from tank
cars last year was more than all crude oil spilled during the four
decades since the federal government began collecting such data
(1.15 million gallons in 2013 compared to 800,000 gallons between
1975 and 2012). While the total number of accidents has decreased
over time, the environmental impact, as measured by gallons spilled
per million ton-miles, has dramatically increased; and

WHEREAS, Numerous local and state officials have called for
a thorough review and improvement of federal standards and
operational practices as they pertain to the transport of crude oil
by rail; and

WHEREAS, On February 21, 2014, United States Secretary of
Transportation Anthony Foxx and representatives of the country’s
major freight railroads jointly released new voluntary operating
practices designed to increase the safety of transporting crude oil
by rail, including the use of safety technology, additional track
inspections, lower operating speeds, and improved emergency
response planning and training; and

WHEREAS, The United States Department of Transportation
announced an Emergency Order on May 7, 2014, requiring each
railroad carrier to notify the emergency response commission in
each state in which the railroad operates trains transporting at least
one million gallons of Bakken crude oil. The notification is
required to include an estimate of qualifying trains traveling
through each county in the state, describe the crude oil transported,
provide applicable emergency response information, identify the
routes over which the crude oil will be transported, and identify
at least one point of contact at the railroad in the case of an
accident; and

WHEREAS, The vulnerability of tank cars to punctures remains
an important threat to safety, as demonstrated in the most recent
rail accident involving transportation of crude oil in Lynchburg,
Virginia, which occurred despite the train traveling 15 miles per
hour under the voluntary, lower speed limit; and

WHEREAS, Crude oil is the fastest-growing type of freight
moving into, out of, or through California. According to the State
Energy Resources Conservation and Development Commission,
the volume of crude oil imported into California by rail has
increased from 45,491 barrels in 2009 to 6,169,264 barrels in 2013,
a 135-fold increase in only four years; and

WHEREAS, Two major (Class I) railroads are currently moving
crude oil into California, to receiving terminals in Richmond and
Bakersfield. Five additional terminals are planned or under
construction in Bakersfield, Benicia, Pittsburg, San Luis Obispo,
and Wilmington. In order to reach these terminals, crude oil must
travel through areas that are densely populated, environmentally
sensitive, or both; and

WHEREAS, The State Energy Resources Conservation and
Development Commission forecasts that with the shift in crude
oil transportation from ships to trains, and with the addition of
several rail receiving terminals by 2016, nearly 27 percent of the
crude oil refined in California will soon be imported by rail,
compared with the 1 percent of refined crude oil that arrives by
rail currently; and

WHEREAS, An increase in tank cars carrying crude oil through
California would increase the likelihood of an accident and,
therefore, the risks to human and environmental safety; and

WHEREAS, The state’s Public Utilities Commission performs
various rail safety inspections. Increasing inspections can aid the
safe transportation of crude oil by rail in California, but cannot
improve the safety of the tank cars themselves; and

WHEREAS, The Legislature has had two informational hearings
on the prevention of, and response to, rail accidents involving
transportation of crude oil, and is currently considering legislation
to improve first responder preparedness; and

WHEREAS, Federal law generally preempts states from
regulating rail transportation, including how hazardous materials,
such as crude oil, are transported by rail, material disclosures, train
routing, and tank car design standards; and

WHEREAS, Despite their hazardous contents, according to the
American Association of Railroads, 85 percent of tank cars carrying
flammable liquids, such as crude oil, do not meet the industry’s
higher voluntary safety standards, established in October 2011;
and

WHEREAS, Canadian National Railway and Canadian Pacific
Railway will charge higher rates for customers moving crude oil
in tank cars that do not meet the industry’s higher voluntary safety
standards. As of May 1, 2017, unmodified older tank cars will be
banned from Canadian railroads; and

WHEREAS, Canadian regulators said in April 2014 that they
will work with the United States Department of Transportation to
determine whether stricter requirements are needed for the North
American fleet of railroad tank cars intended to carry hazardous
material, such as crude oil; and

WHEREAS, The Federal Railroad Administration and the
Pipeline and Hazardous Materials Safety Administration released
a Safety Advisory on May 7, 2014, recommending that offerors
and rail carriers of Bakken crude oil select and use, for interstate
shipments, the tank car designs with the highest level of integrity
reasonably available within their fleet. Further, the agencies advised
these offerors and carriers to avoid using older, legacy tank cars
to the extent reasonably practicable; and

WHEREAS, Tank car manufacturers have called for a uniform,
lasting design standard to ensure that their current and planned
products can be sold to both United States and Canadian customers;
now, therefore, be it

Resolved by the Senate and the Assembly of the State of
California, jointly, That the Legislature of the State of California
urges the United States Department of Transportation and other
relevant federal entities to safeguard communities and
environmentally sensitive areas from rail accidents involving
transportation of crude oil by expediting rail safety reforms; and
be it further

Resolved, That the Legislature urges the United States
Department of Transportation and other relevant federal entities
to prioritize safety considerations over cost-effectiveness in
deliberations about improving the transport of crude oil by rail;
and be it further

Resolved, That the Legislature urges the United States
Department of Transportation and other relevant federal entities
to mandate, at a minimum, the best practices explained in the safety
initiative announced on February 21, 2014, by Secretary Foxx and
railroad industry representatives; and be it further

Resolved, Most importantly, that the Legislature urges the United
States Department of Transportation and other relevant federal
entities to partner with the Canadian Transportation Agency to
improve safety of the North American railroad tank car fleet by
swiftly adopting a stricter design standard for new tank cars, and
by retrofitting or phasing out tank cars that do not meet that
standard; and be it further

Resolved, That the Secretary of the Senate transmit copies of
this resolution to the President and the Vice President of the United
States, to the United States Secretary of Transportation, to the
Administrator of the Federal Railroad Administration, to the
Administrator of the Pipeline and Hazardous Materials Safety
Administration, to each Senator and Representative from California
in the United States Congress, and to the author for appropriate
distribution.